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Does Using GPL Software Violate Sarbanes-Oxley?

Posted by ryuzaki0 on from the dispelling-fud dept.

Anonymous Coward writes "eWeek is reporting that The Software Freedom Law Center has published a white paper that dismisses recent publications from embedded systems seller Wasabi Systems. Wasabi recently released statements focusing on alleged GNU General Public License violations in relation to the Sarbanes-Oxley Act of 2002. The white paper, titled "Sarbanes-Oxley and the GPL: No Special Risk," essentially counsels users of the free software license that they have no need to worry."

34 of 272 comments (clear)

  1. Worded poorly. by Short+Circuit · · Score: 3, Informative

    The SFLC wrote the paper titled "No Special Risk" ... Wasabi Systems alleged SO violations.

    And no surprise...they advertise BSD-based products on their front page. (Not dissing Any of the BSDs, they're cool, IMO.)

    --
    tasks(723) drafts(105) languages(484) examples(29106)
    1. Re:Worded poorly. by ShieldW0lf · · Score: 5, Informative

      Situation One: Your company owns the copyright to the software outright, released it under the GPL, and doesn't accept contributions. No problems. Situation Two: Your company distributes GPL software that it didn't write, with or without modifications. Your company recogizes that this is not its intellectual property, and never should have been, being that it wasn't written by them, and doesn't claim it as an asset. No problems. Situation Three: Your company distributes GPL software that it didn't write, with modifications. Your company fails to recognize that part of this software was never theirs in the first place and that the rest of it is not an economic asset because they do not have the ability to control access to it in exchange for money, but you try to pull some bullshit with the numbers to make it seem like an asset. By doing this, you're misleading your investors and committing fraud. You have a problem. But the problem isn't with the law. The law is working exactly as it should. If you're an OEM using open source software that you sourced externally for free and modified, it's not your property, and you shouldn't be listing it at all. If you've built your business around this lie, you're SUPPOSED to be fucked. That's what the law is for.

      --
      -1 Uncomfortable Truth
  2. Slightly off topic but .... by un1xl0ser · · Score: 3, Funny

    Who can recommend a good book on IT 404?

    --
    v4sw6PU$hw6ln6pr4F$ck 4/6$ma3+6u7LNS$w2m4l7U$i2e4+7en6a2X h
  3. CSPAN called by Anonymous Coward · · Score: 5, Funny

    they want their boring back.

    1. Re:CSPAN called by Firehed · · Score: 4, Funny

      Error 404: Funny not found.

      --
      How are sites slashdotted when nobody reads TFAs?
  4. More info on SOX by kebes · · Score: 5, Informative

    In case you have no clue what "Sarbanes-Oxley" is, you can check out official info and the Wikipedia article. Basically it is a set of laws that place limits on what companies (and those working for them, especially upper management) can do. This has mostly to do with declaring assets and transfers of money. It tries to prevent companies from defrauding investors and so on. These laws were enacted after the Enron scandal.

    Wasabi's complaint is that under these laws, you have to declare all assets, including intellectual property. Their rationale is that using open-source software, you may be in violation of the law if you do not review and declare that usage.

    As was pointed out last time this was discussed on slashdot, a company would only be in trouble if they were already doing something illegal: violating the GPL. If you violate the GPL, then you're misrepresenting your ownership of IP (claiming to have a license you don't), and thus are also violating Sarbanes-Oxley.

    So what's the problem? If a company follows the GPL, then everything is fine. They have nothing to worry about. If they violate the GPL, then they're breaking multiple laws. So, as always, companies should make sure that what they are doing is legal. This in no way diminishes the extent to which GPL software can be used in commercial environments. Wasabi acts as if there is some tremendous additional legal burden to using GPL software. However it seems that Sarbanes-Oxley would equally apply if you mis-represented your ownership of non-GPL software. So there's no difference. (You can read the Software Freedom Law Center white paper for a more complete explanation.)

    1. Re:More info on SOX by Jeffrey+Baker · · Score: 4, Insightful

      More importanly, you can substitute any other license for "GPL" in the parent post. If you misappropriate software under any license, you could have some liability. Duh.

    2. Re:More info on SOX by booch · · Score: 5, Insightful

      In almost EVERY argument against the GPL, you can substitute any other license for "GPL", and the argument would still hold true.

      One of the biggest arguments against the GPL is that if you use it in your own code, you have to agree to its terms. In the case of the GPL, those terms mean that your code must be GPLed. Other licenses set other terms; many licenses don't even ALLOW you to use their code in your code. In any case, if you don't follow the terms, you can be sued for copyright violation. So you always have a choice, no matter what the license -- either follow the license, or get sued.

      --
      Software sucks. Open Source sucks less.
    3. Re:More info on SOX by zero1101 · · Score: 5, Informative

      One of the biggest arguments against the GPL is that if you use it in your own code, you have to agree to its terms. In the case of the GPL, those terms mean that your code must be GPLed.

      This is an extremely misleading statement, if not outright false. Your code must only be GPLed *if you redistribute it*. There are, unfortunately, plenty of cases where PHB's decide not to use GPL software because they don't understand this. And apparently neither do many Slashdot readers.

    4. Re:More info on SOX by Tony+Hoyle · · Score: 4, Informative

      In practice though GPL stuff isn't enforced...

      Witness the number of embedded devices (particularly routers) where you can't get the source code to the GPL parts, and where you can, they're hard linked to closed source binaries with 'no unauthorised distribution' clauses (Yes I mean you Broadcom!).

      So it's perfectly legal to modify the GPL bits, but illegal to distribute the resultant code... thus the GPL is defeated by apathy because nobody cares.

    5. Re:More info on SOX by TubeSteak · · Score: 3, Funny

      Give him a break

      booch (4157) is new here

      --
      [Fuck Beta]
      o0t!
    6. Re:More info on SOX by jschrod · · Score: 3, Informative
      Check out http://www.gpl-violations.org.

      Witness the cases where GPL gets enforced legally, when embedded devices violate the copyright of the netfilter project.

      --

      Joachim

      People don't write Manifestos any more -- what's going on in this world? [Frank Zappa]

  5. Intended Consequences of laws by dada21 · · Score: 3, Informative

    Some think that these situations are unintended consequences of laws that have "good" effects. Sarbanes-Oxley was intended, from the start, to be the ultimate way for governmentto control any corporation at will.

    The law was initially meant to "fix" problems such as the Enron fiasco, but if you rewind just a few years, you see that most of these fiascos came directly out of trying to take advantage of loopholes in previous laws. The SEC colludes with the rest of the all powerful federal government to constantly keep non-preferred companies on their toes, while giving excessive power to the cronies. Sarbanes-Oxley will have the same effect.

    The one light in Congress, Dr. Ron Paul, made an excellent note regarding Sarbanes-Oxley and the cost it will pass on to consumers. The Mises Institute also has a ton of great articles and blog posts regarding the horrors of this law.

    It is time to realize that government is NOT good at regulating business, except from the point of view of the cronies. Bills like this will rarely be used for their original intent, and the un?-intended consequence in the long run is to see criminals made of innocents that had nothing to do with the law's purpose.

    Instead of voting, I think we need to start pitching money in a hat to buy rope for those who violate their oath to uphold the Constitution.

    1. Re:Intended Consequences of laws by dada21 · · Score: 3, Informative

      I have absolutely zero dollars in publicly traded companies. I have no faith in the business of others -- in my own businesses I have so much "insider information" that I can't believe everyone else is a big enough sucker to trust these massive companies to tell the truth about everything.

      That being said, I hate accountants. The average CPA is part of the problem in this country (CPAs as a group lobby Congress to make the tax code worse every year). Instead of requiring companies to do anything, how about telling people that they really shouldn't put their money anywhere but where they trust? I make between 20% and 50% on my various businesses, annually. Most stocks pay no dividend, so they actually make their owners no profit (except on sale, which is ridiculous as companies should pay profits).

      The whole system is a mess, and its a mess because we keep requiring business to perform counter-productive to how a free market performs.

    2. Re:Intended Consequences of laws by dada21 · · Score: 4, Interesting

      Yes, let them go wild. It will teach the average "investor" that there is no such thing as a free lunch. You should NEVER put your money into a business that you don't have faith in or trust. If you make it government's job to make people "tell the truth" you'll get lies covered by legal loopholes.

      The problem starts with the Fed (Greenspan, Bernanke and their inflationary cycle) that makes money worthless over time so we seek to invest it to at least break even. The problem is made worse by the same inflationary cycle that makes our salaries go up slower than the inflationary cost of living increases (which go up because of the money printing). It goes downhill from there -- the SEC makes investors believe they're protected, which in a free market is a fallacy. You are only protected through contracts, not through law forcing people to act a certain way. Beyond contracts you protect yourself by doing business with people with a history (see eBay's feedback system).

      This is all a mess, made worse by people who have faith in others. I have no faith in others except those who have proven their trustworthiness to me. This is why I only invest in businesses I have direct contact with.

    3. Re:Intended Consequences of laws by jdavidb · · Score: 4, Insightful

      Instead of requiring companies to do anything, how about telling people that they really shouldn't put their money anywhere but where they trust?

      Our culture has accepted a lie about trust. We believe that it is the obligation of people to extend trust, and that it is a moral failing when they do not. In reality, the exact opposite is true. Nobody should be trusted until they have proved themselves trustworthy. If person A fails to trust person B, that is solely and completely person B's responsibility. It is not person A's fault. A has to earn B's trust.

      This was clear to me during my dating days in an online singles community when I'd hear women who had just been jilted say, "How can I ever trust anyone again?" Well, the problem is that they were extending trust to people who had not yet earned it, and those people performed as could be expected. Then these women were viewing it as somehow their own moral obligation to trust people after that. In reality they were receiving an education that was pointing them to the obvious conclusion that it was not their responsibility to trust people who have not earned it.

      Extending that to business is left as an exercise for the reader; I've had more success in dating than I have in business. ;)

      --
      Secession is the right of all sentient beings.
    4. Re:Intended Consequences of laws by AuMatar · · Score: 3, Interesting
      Contracts can be enforced in a private market without the force of law. If you sign a contract, you take out contract insurance through a private company. This company issues a "bond" against your signature, guaranteeing the other party that you'll follow through, and also offering you insurance against the other party running off. This happens all the time in the construction industry (I should know, I own a business that gets bonded on each project).


      No, it can't. First off- I sure as hell shouldn't HAVE to take out insurance for every one of my contracts. Yeah, thats a great idea- lets build up yet another level of middle men into society. Second off- its rife for corruption. For example, say I have a contract with a big company- say WalMart (no reason for picking them except their size). The bond company does hundreds of contracts with WalMart a year. They do 3 or 4 with me. We have a disagreement. WalMart tells them to side with WalMart, or they'll never give them buisness again. Who do you think they're going to side with?

      The free market doesn't work on situations like this. They're called externalities, and covered in econ 101. A course I become more increasingly sure no libertarian has ever taken.

      Sure, someone can take their terrible negative feedback and start anew with another company, but would you trust a 30 year old with zero feedback? Neither would I.


      So in a world already hampered by big corporations, you want to add another artificial stumbling block raising the barriers to entry and allowing the big corps to fuck you over even more. Another great idea.

      Don't forget to factor in that over half of all buisnesses fail in under 5 years. So yes, there would at any one time be a majority of buisnesses with little to no feedback. You'd also have a whole new class of crooks- feedback scams. They happen on ebay all the time- someone creates an account, sells a few dozen items to friends to build up feedback, then scams some unlucky guy (or frequently several unlucky guys) out of thousands of dollars in a big sale.

      In a free market, interest rates are free to go up and down. Banks that need money can offer better rates than those who have money. Also, in a free market with a fixed money supply (100% reserves) we'd see soft deflation, which is good for the economy -- it gives people reason to save, increasing the money supply to banks for loans to GOOD businesses, not junk ones.


      Deflation is no better than inflation. Both are good for different sectors of the economy and different economic classes. Inflation is good for people in debt (they need to pay less when the debt is due), deflation is good for debt owners (the debt is worth more when it is due). There's good reasons for prefering inflation to deflation- inflation makes credit very expensive. It makes buisnesses hard to start and homes hard to buy. Historicly inflation in this country was pushed for by farmers, who were land rich and cash poor, so they could more easily utalize their land to generate debt in bad years and repay in good.

      As for a fixed money supply- thats not a good thing. One of the biggest problems in the middle ages was that the fixed money supply frequently left too little cash money in an area, limiting economic growth. The basic macroeconomics equation is change in money supply+ change in velocity of money=change in GDP plus inflation. If the money supply is fixed, you either have no change in GDP or you end up having money cycle very quickly. Quickly cycling money lowers savings rates (you have to spend it more often). Its much preferred to have a slowly increasing money supply. The ideal is to increase the money supply just enough so that inflation is 0, but this is nearly impossible to do. In practice its better to overincrease it and have mild inflation than the reverse.
      --
      I still have more fans than freaks. WTF is wrong with you people?
  6. The original article says ... by gregor_b_dramkin · · Score: 5, Insightful

    violators of GPL are violators of Sarbanes-Oxley.

    solution: don't violate the GPL.

    --
    You can never equivocate too much.
  7. Coming soon to slashdot: by endrue · · Score: 5, Funny

    Does the GPL Violate Sarbanes-Oxley?
    [E]ssentially counsels users of the free software license that they have no need to worry.

    Coming soon:

    Does peanut butter taste like fish?
    No

    Is water wet?
    Yes

    Short and informative - this is great stuff!

    --
    I meta-moderate because I care.
    1. Re:Coming soon to slashdot: by XMilkProject · · Score: 3, Insightful

      Is water wet?

      In the vast majority of possible temperatures it is gas or solid. So I'd say, on average, no; water is not wet.

      --
      Big ones, small ones, some as big as yer 'ead!
      Give 'em a twist, a flick o' the wrist...
    2. Re:Coming soon to slashdot: by General+Alcazar · · Score: 5, Funny

      In English, water implies liquid state:

      Solid H2O: Ice
      Liquid H2O: Water
      Gaseous H2O: Steam
      Plasma H2O: Profit!

    3. Re:Coming soon to slashdot: by Door-opening+Fascist · · Score: 3, Informative

      Bzzt. The IUPAC name for H2O is water, regardless of state.

  8. SOX is change management over financial systems by futuresheep · · Score: 4, Interesting

    SOX requires strict change management controls over financial systems. When we went through our audit, the auditing company was mostly concerned with how changes were made to these systems, what management controls were in place to monitor these changes, and the processes that were in place to ensure their integrity. None of the OSS software used in these processes was given a second glance beyond the aforementioned items. As an example, our use of Nessus as one the our tools for network audits and our archive of Nessus scans was applauded.

    Just my Experience.

  9. Since when is the GPL a EULA by Tweekster · · Score: 4, Interesting

    What would use of software have to do with the GPL... The user does not have to accept the terms of the GPL to USE the software...

    --
    The phrase "more better" is acceptable English. suck it grammar Nazis
  10. Groklaw quotes Moglen: FUD, plain and simple. by toby · · Score: 3, Interesting
    Article here.

    Quoting a response by the Software Freedom Law Center:

    the latest Software Freedom Law Center white paper maintains ... these issues were reviewed and it was found that there is in fact no special risk for developing GPL'd code under SOX. "Under most circumstances, the risk posed to a company by SOX is not affected by whether they use GPL'd or any other type of software. Arguments to the contrary are pure anti-GPL FUD [fear, uncertainty and doubt]," the paper says.
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    you had me at #!
  11. Wasabi = BSD zealots by drwho · · Score: 3, Interesting

    I contacted Wasabi hoping to buy some tools from them for BSD development on embedded platforms. When I asked about a platform they didn't support, the proceeded to criticize that CPU and Linux saying they were underpowered and immature, basically, they want you to buy their favorite CPU. Sadly, this company is made from NetBSD developers, who I had previously thought were among the less rabid BSD zealots.

    I stayed with Linux for embedded systems, and probably will forever, unless embedded BSD is freed from the grips of these people.

  12. Re:Maybe I'm a bit thick but... by ZachPruckowski · · Score: 3, Informative

    How can GPL (or using GPL'ed software) violate the SOX, if GPL'ed software is used as the license permits? Reading the article didn't give me any insight about this issue.

    You can not get in trouble for using software you have a license to use. Period. If you follow the GPL, you have a license to use OSS. Break the GPL, and well, you don't have that license anymore. Ditto with normal software. If you violate an EULA, or steal software, you don't have a license anymore. Using software you don't have a license to is a SOx violation, regardless of whether the software is free or not.

  13. Sarbanes-Oxley is a joke by rfolstad · · Score: 4, Interesting

    I speak from experience and people can and will use SOX as an excuse for anything and everything. The problem is auditors are now trying to understand technology and they just don't get it.

    The basics of SOX is that your CEO must sign that the proper controls are in place to ensure that all changes made to production systems that affect the reporting of financial information are approved changes.

    Companies can take this to mean that changes to your firewalls, mail servers and webserver need to be logged and monitored with scrutiny. And they will even send "auditors" in to take screenshots of /etc/shadow hahahahahahhaa.. It's hilarious.

    Realistically it is impossible to be 100% SOX compliant and profitable. This bill will be gone within 5 years and other countries without silly laws like this will prosper in the meantime.

    So yes. If there is a not an audit trail in place where someone approves of applying that patch to the linux kernel on all production machines then you are not SOX compliant. Just like if someone doesn't approve installing that critical service pack from microsoft. Without approval and test cases you will fail your SOX audit unless you pay the extortion^H^H^H^H^H^H^H^H^H fee that anderson^H^H^H^H^H^H^H accenture is charging these days.

  14. Scuttlemonkey does it again! by Fujisawa+Sensei · · Score: 3, Insightful
    Does Using GPL Software Violate Sarbanes-Oxley?

    Does this actually have anything to do with the article? No

    The Article says that violating the GPL may be a SOX violation, but no more so than any other EULA.

    I've seen a lot of complaints about Zonk; SM is worse.

    --
    If someone is passing you on the right, you are an asshole for driving in the wrong lane.
  15. Wasabi Burns by Doc+Ruby · · Score: 4, Interesting

    I knew the founders of Wasabi Systems, here in NYC. The original "brains" behind the startup, which planned a "Red Hat for NetBSD", got screwed by his lawyer partner in the late 1990s, and left. No surprise to hear their business model is lying about GPL (Linux) in press releases.

    --

    --
    make install -not war

  16. Re:Maybe I'm a bit thick but... by booch · · Score: 3, Insightful
    According to SOX you need to give an account on who owns all your IP.
    OK.
    Here is the problem. You run linux and your software is an asset used to help run your company. Who owns it?
    I still don't see the problem. It's not my IP, so I don't have to account for it. Really, you'd have the same problem with code from Microsoft and other proprietary software vendors. Much of the code they sell is sub-licensed code owned by other companies. Heck, some of it is even BSD-licensed code.
    --
    Software sucks. Open Source sucks less.
  17. Thats no better than what you complain about by Wizardry+Dragon · · Score: 5, Insightful

    Is this an 'innocent until proven guilty' world or a 'guilty until proven innocent' world?

    I tend to take a decidedly buddhist view when it comes to that, nothing to do with the religion (before I get a religious flamewar going here), but I believe in moderation. Completely distrusting everyone is no worse than complete trusting everyone. You have to strike a balance - the way our world works depends upon it. Buisness depend upon trusting that the average consumer is not a theif (someone should tell the RIAA that, before they strangle the music industry), relationships depend upon trusting that the person you are with will be true to you, in whatever way that means to you.

    ~ Wizardry Dragon

  18. Beware Your EULA by Stephen+Samuel · · Score: 3, Interesting
    Man, if you're worried about the GPL, imagine what happens if you use Microsoft Software?

    Under the MS EULA, once you upgrade your software, you have no rights to use the older version(s). This means that if the 'upgrade' breaks your mission-critical software you are so toast.
    If you don't revert your software, then your mission-critical software wll remain broken until Microsoft deigns to fix the issue.
    If you do revert your software then you're in violation of the EULA and subject to having Microsoft demand that you delete the entire package at any time.

    With the GPL, you're only likely to run into problems if you want to distribute the software without distributing the full source. You can sometimes get away with not publishing the source to isolated parts of software written by you, but at that point you're running on the border and should talk to lawyers to make sure that you're not crossing over the line.

    --
    Free Software: Like love, it grows best when given away.
  19. Cui bono -- who benefits -- is often important. by jbn-o · · Score: 3, Informative

    The reason why they're making their case against the GPL is important. Proprietors are saying that the GPL makes them nervous, they don't like the commons the GPL creates and maintains. Proprietors want to discourage everyone from using and developing GPL-covered code so that they have less competition and won't have to spend their time lobbying governments around the world to help make Free Software implementations of various programs impossible. Thus this is just another legal risk FUD case against the most widely used Free Software license, the GNU GPL which fails to mention what the Software Freedom Law Center points out:

    "Historically, GPL violations have not triggered massive lawsuits for damages the way that violations of proprietary license agreements have. The primary enforcer of the GPL is the Free Software Foundation (FSF), who has never used a GPL violation as the basis to go to court to seek a large damage award or enjoin software distribution. The FSF's stated policy is to ensure compliance, not to prevent software distribution or to seek damages.

    What this means practically for the vast majority of companies complying with SOX is that the threat to their businesses posed by potential GPL license violations, both inadvertent and intentional, is so low as to be immaterial. In any case, the financial impact of GPL violations is likely to almost always be lower than the impact of proprietary license violations, for which parties routinely bring suit for damages."

    And when it comes to GPL-covered software being so complicated to deal with, the SFLC has this to say:

    "In most instances, compliance with proprietary licenses is much more complex than GPL compliance because the GPL is a general license with obligations that are fairly simple and understandable. No money changes hands, seats are not counted, and licenses are not time-limited. GPL compliance is a fairly simply matter, and if a company has concerns about how to comply, the FSF is staffed with experts who can and do help companies create efficient compliance procedures. Proprietary licenses, on the other hand, often contain both a greater number of provisions and a greater complexity than the GPL. Thus, a company trying to understand its rights and comply with its obligations under such a complex and detailed license will have a much harder time than one who must merely comply with the GPL. Accordingly, the risk of inadvertent license violation is often greater with non-GPL licenses."

    --
    Digital Citizen